NJ HomeKeeper hits its stride

From the Record:

Foreclosure-prevention loans helping more in NJ, state says

Once criticized as ineffective, the state’s main foreclosure-prevention effort has improved its performance and is now helping 250 troubled homeowners each month, Lt. Gov. Kim Guadagno announced Tuesday.

The program, called N.J. HomeKeeper, drew sharp criticism last year from lawmakers and housing advocates, who said that it was failing to serve enough homeowners. From its inception in May 2011 to June 2012, it had spent less than 10 percent of its $300-million, federally funded budget, and had helped only about 500 homeowners.

Even the department that ran the program, the state Department of Community Affairs, acknowledged its shortcomings, and took steps to make HomeKeeper more effective. Since last fall, the department has increased staffing, expanded eligibility for homeowners, and done more to publicize the program.

As a result, Guadagno said Tuesday, the HomeKeeper program has now committed nearly $96 million in assistance to more than 2,300 homeowners since May 2011.

“While it is gratifying to see our hard work result in more families staying in their homes, we recognize there are still more people in need of assistance,” Guadagno said in a statement.

Assemblyman Gary Schaer, D-Passaic, who had criticized HomeKeeper’s failings, praised Constable Tuesday for “putting the program on the right track.” But Schaer also said more needs to be done, especially in light of economic stresses such as superstorm Sandy and continued high unemployment in the state.

“The question we need to ask ourselves, given the thousands of people in foreclosure, is whether 250 people a month is enough?” Schaer said. “That 250 figure should be 500.”

Under HomeKeeper, homeowners at risk of foreclosure because of under- or unemployment can get a zero-interest loan of up to $48,000. The loan can be forgiven if the homeowner stays in the house for 10 years.

This entry was posted in Economics, Foreclosures, New Jersey Real Estate, Risky Lending. Bookmark the permalink.

60 Responses to NJ HomeKeeper hits its stride

  1. grim says:

    A $48,000 bonus for staying in your house for 10 years?

    Damn. Apologies to everyone for recommending you take the prudent approach.

  2. grim says:

    Suppose you could have started with the first time homebuyer credit, $7,500. Added another $2,000 in tax credits for energy efficiency upgrades. Got a HomeKeeper “loan” for $48k, and then refinanced it all at 3.5% through HARP. Total savings, $57,500.

    Maybe a little principal forgiveness under HAMP for good measure?

    Or, you could have lived payment free for around 2.5 years, assuming an estimated rental equivalent of $2,800, that would have saved you a whopping $84,000.

  3. grim says:

    From the Hill:

    Obama cites Menendez bill in address

    President Obama on Tuesday cited legislation crafted by a Senate Democrat embroiled in an ethics controversy during his State of the Union address.

    In the speech, Obama pressed Congress to let responsible homeowners refinance their loans into lower interest rates to provide a boost to the housing market’s recovery and push along the broader economic recovery.

    Sens. Robert Menendez (D-N.J.) and Barbara Boxer (D-Calif.) reintroduced legislation last week that would help millions of responsible homeowners refinance at lower rates and save thousands of dollars each year.

    The Menendez-Boxer bill, which would streamline refinancing for Fannie Mae and Freddie Mac borrowers, had been expected to come up in November. But the Senate never picked up the measure as negotiations over amendments in the Senate Banking Committee broke down amid other pressing lame-duck issues.

    The Obama administration added it to the congressional to-do list last fall.
    “It’s time that Congress finally put families first and give homeowners who have played by the rules a fair chance to refinance at today’s low rates,” said Menendez, who is facing a Senate Ethics Committee investigation into allegations of misconduct.

  4. Essex says:

    Boo Yah.

  5. Essex says:

    The old guy hit like a girl.

  6. grim says:

    The Menendez-Boxer bill is “HARP 3.0”, and would extend HARP to homeowners whose loans are held by entities other than Fannie or Freddie. This is entirely different from a risk perspective, as under HARP 2, the loans are already backed by Freddie and Fannie, so reducing the rate directly reduces the GSE’s exposure to default. HARP 3 would be a net increase in dollars at risk at the GSE’s, as that risk is transferred from the current holders and guarantors.

    From the WSJ:

    An Overview of President Obama’s Refinancing Proposals

  7. Mike says:

    Good Morning New Jersey

  8. Mike says:

    Think the first time buyer HUD loans require you to stay at least ten years also.

  9. HomeKeeper is essentially house arrest.

  10. grim says:

    Homeownership is a pretty shitty option if your time horizon is so short that 10 years sounds like prison to you. The transaction costs (and moving expenses) will eat you alive and you’ll barely make a dent in the principal. Buy fees, sell fees, loan fees, moving, minor improvements, paint, etc, I bet you can easily hit 10% of purchase price or more.

    I’m not a big fan of the “property ladder” concept. If you are lucky enough to chain smoke houses in an upmarket, you’ll make out, but in a declining or sideways market, you’ll always be chained to a huge mortgage.

  11. stan says:

    Essex- just messing with ya

    “The Old guy hit like a girl”

  12. In the new normal (of unintended consequences), ten years in a home will be a short duration of ownership.

    Plenty of 40-50 y/o people I know think they will be leaving their current homes feet first.

  13. In the future, you will have the freedom to move only if you do a SRO fractional rental in a suburban McMansion slum.

  14. No one will be spared.

  15. chicagofinance says:

    Lost in this analysis is why this redneck in a collared shirt created enough of an issue to warrant an assault by some old fart……but we digress…..

    stan says:
    February 13, 2013 at 7:52 am
    Essex- just messing with ya

    “The Old guy hit like a girl”

  16. JJ says:

    NJ is the stupidest state in the US, so you nuts that you are starting a program to pay people to stay in home at same time you are starting a program to buy people off to get them out of their homes.
    I bet homes in flood zones will qualify and they will get the $48k plus the FEMA pay out when home washes away

  17. grim says:

    16 – As far as I know, storm damage doesn’t meet the eligibility requirements, neither does medical-related financial problems.

    The cash to fund the program is part of the Hardest Hit program, funded by Uncle Sam. If you don’t use it, you lose it, and all the other states that are part of the program have been dispensing funds in a similar manner. It would be “stupider” for NJ to not do this, since this is one of the few times that NJ has seen some kind of payback for the tax dollars we send to Washington.

  18. Comrade Nom Deplume, the original maker of Scungilli Roll says:

    [15] chifi,

    I don’t question the event; I had something similar happen to me in DC once when I got accosted by an old fart.

    My question is how the old fart managed to land a punch?

  19. Painhrtz - Don't just stare at it. Eat it! says:

    Grim also stay in your home 10 years and 10 years of taxes at 6000 technically the goverment comes out ahead 12K. Still punishing the prudent what a country.

  20. grim says:

    19 – Municipalities would get their tax dollars regardless. If the owner doesn’t pay, the lender probably will (if they don’t, they’ll eventually need to deal with a tax lien that has priority over their first or second lien). If they’ve already taken it back as REO, the lender absolutely will. In the very rare case that the lender waives their interest in the property and decides to forgive the loan, the outstanding tax balance will just come up at a tax sale and someone will buy it and hound the owner till they die, or they initiate foreclosure and take the property (probably a great business model for the entrepreneurs out there).

  21. grim says:

    What is “F*ck You, Pay Me” in Latin?

    Wondering if we can petition the state government to require that it be written on the top of the quarterly tax bills.

  22. njescapee says:

    In my short sale transaction not sure what the seller owes on the 205k purchase price paid in 2006. HUD form states I pay about 81k, out of that bank nets about 70k, almost 7k goes to the brokers and 3.5k to taxes. Initial purchase price was 71k in 1991.

  23. Painhrtz - Don't just stare at it. Eat it! says:

    Grim true, her is the latin version form google tanslator

    te pedicabo mihi redde

  24. grim says:

    Rumors flying that Revel is filing for bankruptcy.

    Warm up the bulldozers, it’s time to raze AC.

  25. Mike says:

    A perfectly good escalator going to waste

  26. freedy says:


    Several weeks ago I posted a question. Where can I get a fake driver license in NJ.

    Question is answered , it seems that they are available . Next time your wondering about the crazy drivers in NJ. Many can’t read the signs. NJ an original Welfare State and growing

  27. Essex says:

    18. He didn’t but he did try! Hilarious. A little weird. Slightly pathetic.

  28. Essex says:

    11. I laffed!

  29. Anon E. Moose says:

    Grim [17];

    I look at it like the Federal Free Crack Distribution Program — the Feds are giving us money to buy crack and distribute it in High Schools, we lose the money if we don’t buy and give away the crack, and if we lose the money we don’t get any benefit for the taxes we send to Washington. There are some things that aren’t worth doing, even with OPM.

  30. Brian says:

    Interesting read. Check it out before they scrub the internet of it.


  31. Anon E. Moose says:

    Grim [24];

    Good move. Screw the initial investors and restructure now, before they waste two years struggling against the inevitable, by which time revenues will be down because they will no longer be the “Hip New In Place”. Mirage is still a great property, but it doesn’t shine like it used to with Wynn right across the street.

    All this is to say nothing of the structural shift that has AC being gored by Pa casinos and slots at Aqueduct.

  32. JJ says:

    I got paid $31,900 to live in a flood zone and I did not even have to live there ten years.

  33. Painhrtz - Don't just stare at it. Eat it! says:

    Ac should fail. The problem has always been you can not look past the fact the casinos are situated in the slums. AC is Detroit with a nicer beach.

  34. grim says:

    31 – I think there is a joke somewhere in there.

    How do you make a billion dollar casino? Invest $2.4 billion.

  35. grim says:

    Actually, that’s more truth than joke now that I remember Morgan Stanley walking away from their almost $1b investment.

  36. Libtard in Union says:

    Revel is a lesson in terrible management, though even with experienced managers who might have understood the AC market better, it probably still wouldn’t have a chance in hell of breaking even in the debacle that is now the AC gambling market. And what a shame as it’s really a nice place, but run worse than any casino I’ve ever visited. Sadly, I’ve visited a lot of them.

    If anyone is heading to the AC beer festival on April 5th and/or 6th, let me know and I’ll buy you a drink!

  37. JJ says:

    what was that big bs article in WSJ about people having to raise houses in NJ by shore. Exactly who is making them and how can they make you?

    That is new construction only and for existing homes the worst they can do is raise you flood insurance or you can just skip flood insurance.

    FEMA told me they tried to get folks to raise their homes in NO after Katrina, lots did those that did not got flood insurance jacked to $4,800 a year.

    Folks he said quickly realized that is $400 a month and they sign up every June and cancel Every November. They only pay for the six months floods can happen.

    I am looking at a place by beach this weekend a condo where building covers flood. I plan on doing contents only for flood season, or at least doing a small amount of coverage in non hurricane season. So many ways to skin a cat that whole article basiclly said folks want cheap flood insurance and if homes are raised govt should pay Yet is is a WSJ cover story

  38. JJ says:

    what is up with all the Kate Upton stuff? Really she is on everything now, SB Commericals CNBC today, SI, supermodel etc.

  39. Painhrtz - Don't just stare at it. Eat it! says:

    JJ hot blonde huge personalities, likes sports. Self explanatory really

  40. JJ says:

    Damm it I am going to get her to retweet me asap.

    Painhrtz – Don’t just stare at it. Eat it! says:
    February 13, 2013 at 12:42 pm

    JJ hot blonde huge personalities, likes sports. Self explanatory really

  41. Essex says:

    Believe you me Kate is a keeper.

  42. JJ says:

    Me like her a lot. Only trouble is her sister no longer works for Jets. So I have no JU-ICE

    Essex says:
    February 13, 2013 at 4:07 pm

    Believe you me Kate is a keeper.

  43. Painhrtz - Let me face a little peril says:

    What the hell did everyone decide to work today or go and get lost looking up Kate Upton pics

  44. JJ says:

    Kate Upton is why PC screens need a windshield wiper

    Painhrtz – Let me face a little peril says:
    February 13, 2013 at 4:11 pm

    What the hell did everyone decide to work today or go and get lost looking up Kate Upton pics

  45. She’s like a female Corslime:

    By Seth Augenstein and Matt Friedman/The Star-Ledger

    FRANKLIN TOWNSHIP — Click it or ticket.

    State Sen. Barbara Buono chose the latter, according to police, after receiving minor injuries in an accident in Franklin Township Monday night.

    Buono, the only major Democratic candidate for governor, was rding in the back seat without a seat belt when the crash occurred.

    The senator received a cut above her eye — along with a summons that carries a $46 fine.

  46. Young Buck says:

    Oh no…

    Anxiety Over Future of Bike Lanes

    During Mayor Michael R. Bloomberg’s tenure, New York City has become a cycling haven, with sprawling lanes across each borough and a bike-share program set to begin this spring.

    But as Mr. Bloomberg is to leave office at year’s end, there is widespread concern among cyclists that a reckoning awaits, and that the city’s next mayor may end this period of bike-friendly programs and policies.


  47. This just in: NYC to allow high-powered rifle hunting for cyclists.

  48. …program to be modeled after Camden’s successful cyclist hunting initiative.

  49. Grim says:

    IOC replacing wrestling with Urban Pentathalon.

  50. Essex says:

    Salsa Dancing…. The new sport. Bet on it.

  51. Juice Box says:

    Grim – Bunch of wussies on the IOC executive board that never wrestled or did much more than rowing, fencing and sailing.


    It takes a real man to spladle another guy and still shake hands afterwards.

  52. grim named commissioner of Urban Pentathlon. Hackensack River named US training center.

  53. IOC still debating whether to use mannequins or actual human corpses for Urban Pentathlon in the next Olympics.

    IOC also debating whether UP is a winter or summer sport.

  54. The Original NJ ExPat says:

    My comments from 6 months ago on the NJ HomeKeeper program:

    The Original NJ ExPat says:
    September 6, 2012 at 7:10 am
    [6] Surprising. I thought for sure that $100 million was going to be sucked up post-haste by the addled offspring of Trenton pols. IIRC, you have to be recently unemployed and current with your mortgage until the financial hardship and then you can collect $50K over two years for mortgage payments and if you stay current after that you don’t have to pay the money back? It took so long for NJ to even set up the parameters of the program that I was sure that NJ politically connected relatives were getting set up in cheap condos, getting unemployed, then getting delinquent on their mortgages just in time to qualify. Under the right conditions you could be living in your own condo, drawing $600/week unemployment as walking around money and have the government pay your mortgage for two years.

  55. Jamie Salcedo says:

    There isn’t that much foreclosure issues where I live here in northern NJ. I’ve seen more people have quality issues when home inspectors don’t really meet their end of the bargain and homeowners have to go after their e and o insurance money, but at least the home is getting fixed and not completely abandoned.

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  57. Ricky Tickytavvi says:


    More politicians from preventing the market from clearing and protecting the stooges from the consequences…ALL IN THE NAME OF THE GREATER GOOD.

    Keep it and the toilet paper you’ll need once this mess is done.

    Ricky T

  58. Ricky Tickytavvi says:


    AC is tanking and now that online gambling only requires an AC presence, the politicians idiotically thought that would puff up the value of the AC real estate and gambling enterprises.


    Ricky T

    Ps. WTFU and gets some critical reaosning skills

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